Reflections - Misleading Ledger (Part Two)

Auditing Still Life

Spence returned from the October 12 township meeting, petted the cats, and said, “Veronica resigned.”

A hoot stuck in my throat.

Veronica, the second French Creek Township secretary-treasurer of the year, managed the overwhelming job by deferring to the supervisors or PSATS for every decision. Though her resignation boded well for the township, it meant the two other elected auditors and I had to balance Veronica’s books—when we finished the books from Zina, the previous secretary-treasurer who kept the infamous, misleading ledger.

“Oh my,” I whispered.

The elected auditors had already worked eighteen hours getting closer to solving Zina’s accounts. But closer isn’t to-the-penny which is how Nancy, the lead auditor, has accounted for decades. Because Nancy worried about the amount of time we were spending on the books, I offered to meet off the clock without Carol, the newest auditor who wanted every penny she earned from the township.

A week later, Nancy arrived masked and covered my kitchen table with spreadsheets of Zina’s state accounts. “It’s got to be one transaction in the wrong place.” Nancy added notebook papers with totals for each of the categories. “We just have to find it.”

Looking for a specific revenue or expenditure in Zina’s books was like looking for a naked hickory nut at the bottom of an acre-wide leaf pile.

And Nancy’s one translation theory didn’t hold up. We found two transactions—a bill marked paid but not paid and a paycheck recorded in the state account but paid with general money. That left an extra $1441.93.

Fingertips dancing on calculators, we checked the beginning bank balances, the ending bank balances, and the three revenues—liquid fuels (gas tax), turnback payments (road maintenance funds), and bank account interests. No problems. Nancy waved a spreadsheet. “The error had to be in expenditures.”

We added them for the trillionth time. Still off by $1441.93.

Butt numbing from hours sitting, I said, “Let’s check the bank statement against her printout ledger again.”

One by one, I read the amount of the check from the bank statement.

Nancy stared at Zina’s ledger. “Yes.” 

I put a blue dot beside Nancy’s orange check and Carol’s green dot. Every amount matched. Wondering where we’d find the error, I put the statement in the folder.

“Wait. There’s one more.”

I pulled the statement out and scanned the list. “All the bank entries are accounted for.” I checked twice more.  “I don’t have another expenditure.”

“There’s another here for one thousand four hundred forty—”

I jumped out of the chair, tossed the blue pencil over my head, and screamed, “Woohoo!”

Three cats scratched their claws into the hardwood floor and scurried to the bedroom.

We’d balanced Zina’s state account. Had we made her general balance worse?

The morning of October 26, Nancy’s cheery voice greeted me over the phone. “I got Zina’s general to balance within sixty-nine dollars. I want you to check my numbers.”

Hours later, Nancy placed her tote bag on my kitchen table. “Gretchen called. She asked me to come over because she had some questions.”

Gretchen, the third township secretary-treasurer of the year, had asked the head elected auditor for help? No wonder Nancy’s voice had sounded so cheery.

Ande leaped onto the table and rubbed his whiskers against the bag handles.

“Gretchen got the computer out. She changed the paycheck that was in the state account and should have been in general.” Nancy petted Ande and smirked.  “Gretchen discovered the books are a mess. Because she’s new and doesn’t want to make waves, she wants the auditors to take the heat for exposing the errors.”

“Great! We can work with her!” We’d already taken heat for asking the previous two secretary-treasurers questions. A little more heat wouldn’t hurt.

Nancy reached around Ande to pull notebooks and papers out of her bag.

Ande rolled then set his front paws on Nancy’s notebook.

She spread the general ledger and the check detail printouts beside the cat. With her pen, she pointed from one sheet to the other showing Zina had recorded two deposits and thirteen checks in August but didn’t make the transactions until September. Those fifteen misleading entries threw the ending August balance out of whack. And that was the month Zina had trained Veronica. I dreaded checking Veronica’s books—assuming we finished Zina’s general account.

Nancy eased the notebook from under Ande’s legs. “I need that. You can have this one.” She slid a folder back under.

Ande blinked but guarded the substitute.

While I checked Nancy’s detailed figures, Ande jumped down from the table and Gilbert jumped up. He walked across the calculator getting a percentage. I deleted that. But in each of four calculations without the cat’s assistance, I found a mistake in Nancy's 406 account numbers. “We’re off one hundred seventeen dollars and forty-five cents, not sixty nine.”

Nancy and I checked every revenue and every expenditure twice more.

Still $117.45 off.

“That ruins my idea of finding the sixty-nine dollars in the December-January transition mess.”  Nancy slammed her pen against the papers and pushed her chair away from the table.

Rills jumped beside Gilbert. The two cats sat side by side and stared at Nancy’s masked face.

I shuffled through papers. Obviously, going over the accounts one more time would be futile. “We need a plan. What should we do next?”

“Cry.”

Taking a deep yoga breath, I forced my foggy brain to think. “We could wait for the October bank statement. Zina’s transactions don’t always clear the next month.”

November 4, five days before the township meeting, I swept the porch, dug out the chair cushions I’d put in winter storage after our first laying snow, and set up three wooden tray tables. Though wind whipped my hair, the sunshine and 66° F (19° C) air temperature made a balmy day for auditing COVID-style on the porch. Nancy and I wore masks and windbreakers. Carol, the first-year auditor, came mask-less and kept her winter coat on. “I’ll sit by the gate. The wind’s blowing in this direction.”

Nancy pulled papers from her tote bag, secured them on a clipboard, and handed them to Carol. “Gretchen printed out computer ledgers for August 15 through October 30. Check Veronica’s state accounts with Janet. I’ll work on the general.”

Nancy plopped onto the love seat and pulled out more papers.

I grabbed the files for September and October expenditures. While I read the company, check number, and amount for each bill, Carol searched for the item on the ledger.

“This is confusing,” Nancy mumbled. “I’m not grasping it.”

Carol’s face paled.

“It’s Zina’s ledger,” I said to lower Carol’s concern. “Of course it’s confusing.”

 

“Actually, it’s Veronica’s ledger.” Nancy’s underlined a questionable category number.

After Carol and I finished totaling accounts and following paper trails, I said, “Everything checks out, Nancy.”

“Good.” Nancy kept her eyes on Veronica's figures. “Show Carol how to balance the state funds.”

“Okay, Carol. Add the opening bank balance and the revenues. Subtract the expenditures and you get . . .”

Carol straightened in her chair. “Twenty-nine thousand nine hundred fifty dollars and seventy-six cents.”

I gritted my teeth. Carol is the most accurate calculator of the three of us, but maybe she hit the wrong key. “Let’s try it again. I’ll do it too.”

Bending over our calculators, we did the math and both came up with—

“The same number.” Carol pushed her glasses higher on her nose.

Nancy marked her place with the pencil point. “What’s wrong?”

I rubbed my temple. “We have over nine thousand dollars too much.”

“Did you check transfers?”

Carol and I nodded like bobbleheads.

“Well they are treated as expenditures because the money goes to the payroll account.”

Duh.

After recalculating, I had good news. “We’re only short thirty-five dollars and thirty-eight cents this time.”

“Did you add the interest?”

I flipped through my notes. “We added the three interests listed on the ledgers for the three accounts.”

“You should only have two. September and October. Ignore August.”

Carol’s face morphed from worried to impressed.

We recalculated and matched the bank’s ending balance. I jumped out of the chair, wiggled my fanny, and gyrated to the beat of the wind chimes which would have earned me a hefty fine and a penalty if I’d been in a football end zone. Both Zina’s and Veronica’s state accounts balanced.

Porch Audit

We just had to balance their general accounts.

Carol left to cook for her church’s potluck.

Before Nancy left, she and I checked general revenues and expenses—ready to balance next time.

But Nancy didn’t wait until next time. Because she had left the two cartons of township records on the log table in my great room, she called daily.

“How many bills did Hillside submit for gravel in September?”

“What was the general checking account balance on August 31?”

“When were taxes last deposited by Berkheimer?”

My answers didn’t balance the accounts.

Wearing masks on November 5, Nancy and I squeezed on one side of the kitchen table while Spence unloaded groceries on the other side.

“I want to check Veronica’s categories with you,” Nancy said. “Then we can add her numbers.”

That accomplished, we calculated—off by more than three thousand dollars.

During the next week, Nancy called twice a day.

“I think I found the mistake . . . oh . . . no. That didn’t work. Never mind.”

“Did Byler’s Hardware send two bills or one in October?”

“Why is the number of John’s reimbursement check crossed out?”

In my dreams, I scoured the ledgers for three thousand dollars.

The next Thursday, Nancy petted Ande then handed me her personal spreadsheets for corrected revenues and expenses. “Grethen printed a trial balance. We need to match the computer’s categories with my calculations.” Still petting Ande, Nancy sat and read the first amount on Gretchen’s printout.

I scrutinized Nancy’s sheets. We reconciled several mismatched items then reached the 406.05 account. Gretchen had $43.82 more than Nancy’s totals. “That number sounds familiar,” I mumbled.

Nancy chuckled. “They do after a while.” She sifted through our handwritten notes of anomalies. 

I picked up the seventy-seven page ledger Veronica had given us and ran through all the 405.06 accounts searching for that amount.

“Found it!” we shouted in unison.

Nancy held up a slip of paper. “You’d written a note that the check hadn’t cleared.”

 

Finger on the ledger line, I said, “In December of twenty-nineteen, Zina wrote a reimbursement check to Dan for that amount.”

Nancy whipped out her folder of township minutes. “Zina reported the public auditors canceled the check to get last year’s accounts to balance. She must have zeroed out the check in the bank account but left it on the ledger.” Nancy patted my back. “You are a breath of fresh air.”

It’s hard to be a breath of fresh air wearing a mask in the kitchen. I blushed but Nancy couldn’t see.

We found two more checks the public auditors canceled but Zina neglected to remove from the ledger. That left $190.60 to reconcile.

Nancy packed her papers and walked to the door. With her hand on the door knob she said, “I’m going to meet with Gretchen next week, have her put all our corrections in the computer, and then we’ll check for that hundred ninety dollars. It can only be in one or two places.”

I waited by the phone. Nancy didn’t call for six days in a row. Was she sick? Did her computer break down? Had her husband been in an accident?

The Saturday morning before Thanksgiving, I decided to call Nancy. I reached for the phone and it rang.

“Hi, stranger.” Nancy’s voice sounded weary over the line. “I spent a whole afternoon at Gretchen’s. We got the corrections into the computer.”

“Do you want to meet to finish the audit?” I glanced at my mostly blank calendar to see which days would work best.

“No. Checking the accounts one more time won’t change anything.”

She had a point.

“The money can only be another check the public auditors canceled and Zina didn’t remove from the ledger or a transaction one of the secretaries forgot to list.”

Nancy was right again.

“We’ll find out which when we audit Gretchen’s books next February.”

Next February?

No more auditing until February?

I hung up the phone and yelled, “Woohoo!”

Ande Helps